Obama floats offering first-ever drilling lease in Atlantic

2015-01-28 10:06


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Washington - The Obama administration floated a plan on Tuesday that for the first time would open up a broad swath of the Atlantic Ocean to drilling, even as it moved to restrict drilling indefinitely in environmentally-sensitive areas of the state of Alaska.

The proposal envisions auctioning areas located more than 80km off the coasts of Virginia, North and South Carolina, and Georgia to oil companies no earlier than 2021, long after President Barack Obama leaves office. For decades, oil companies have been barred from drilling in the Atlantic Ocean, where a moratorium was in place up until 2008.

The plan also calls for leasing 10 areas in the Gulf of Mexico, long the epicentre of US offshore oil production, and three off the Alaska coast.

"This is a balanced proposal that would make available nearly 80% of the undiscovered technically recoverable resources, while protecting areas that are simply too special to develop," Interior Secretary Sally Jewell said in a conference call with reporters. "The areas off the table are very small in comparison to areas on the table."

The plan, which covers potential lease sales in the 2017-2022 time frame, drew immediate reaction from Capitol Hill, where Senator Lisa Murkowski, an Alaska Republican, called it a war on her home state, and where Northeastern Democrats objected to the proposal for the Atlantic Ocean. The proposal comes as the US is in the midst of an oil boom and when oil prices, and pump prices, are at near-historic lows.

Coastal economies

"Opening up the Atlantic coast to drill for fossil fuel is unnecessary, poses a serious threat to coastal communities throughout the region, and is the wrong approach to energy development in this country," said New Jersey Senators Cory Booker and Robert Menendez, and Representative Frank Pallone, in a statement.

Interior Department officials cautioned that they were in the early stages of a multi-year process, with Jewell saying they were only "considering' a lease sale in the Atlantic and that areas could be "narrowed or taken out entirely in the future".

For Alaska, President Barack Obama issued a memorandum on Tuesday placing 4 million hectares of the state's offshore resources off limits indefinitely. The memorandum withdraws from leasing parts of the Beaufort and Chukchi seas, as well as a shallow 50km shelf in north-western Alaska called Hanna Shoal, citing their importance to Alaska natives and the sensitive environmental resources.

"There are some places that are too special to drill, and these areas certainly fit that bill," Jewell said.

Obama in early 2010 announced his intention to allow drilling 80km off the Virginia coast, only to scrap it after the BP oil spill in the Gulf of Mexico. But the administration has allowed oil and gas companies to explore for oil and gas in the Atlantic in the meantime, which is the initial step prior to drilling.

Environmental groups were quick to criticise the proposal, saying offshore drilling had not become safer in the years after the BP disaster. Congress, despite recommendations, has not passed any new laws to deal with the lapses identified in the wake of the spill, which was the largest offshore incident in US history.

"This 5-year plan could destroy our coastal economies for decades to come, costing future generations the fishing livelihoods that have been part of their local fabric for generations," said Oceana's vice president Jacqueline Savitz.

But the oil industry applauded the move, saying much of the US's offshore potential remains untapped. Production from offshore areas accounts for 16% of the oil produced in the US now.

The Independent Petroleum Association of America said in a statement that while the proposal is a step in the right direction, it "urges the administration to keep all offshore areas available to exploration."

According to documents obtained by The Associated Press through the Freedom of Information Act, at least four firms have filed applications with federal fisheries managers to conduct wide-scale seismic imaging surveys in the Atlantic to explore for oil and gas deposits.

Read more on:    barack obama  |  us  |  environment

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